Wonder what tomorrow’s business enterprise might look like? A good place to start looking for answers is Andrew McAfee.
McAfee, a cofounder of MIT’s Initiative on the Digital Economy and Principal Research Scientist at MIT Sloan School of Management, has spent most of his career studying how information technology changes the way companies perform, organize themselves, and compete — and, at a higher level, how computerization affects competition, society, the economy, and the workforce. His 2009 book Enterprise 2.0: New Collaborative Tools for Your Organizations Toughest Challenges showed how companies could effectively use the collaborative philosophy and technologies of the web both inside their organizations and externally with customers and partners.
In Race Against the Machine: How the Digital Revolution Is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy, McAfee and coauthor Erik Brynjolfsson (also a cofounder of the Initiative on the Digital Economy and Director of MIT’s Center for Digital Business) focused on how advances in technology threaten to automate not only many manufacturing jobs but also those held by today’s service and knowledge workers.
McAfee and Brynjolfsson’s latest book, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies, builds on their previous book, but with greater emphasis on the benefits to society of advancing technology. In the book, a New York Times bestseller when it was published earlier this year, the authors argue that digitization has brought society to “an inflection point in the right direction — bounty instead of scarcity, freedom instead of constraint.” In fact, the word “bounty” appears more than 30 times in the book.
But the authors don’t back away from the main theme of their previous book — that is, the societal disruption this change is likely to entail. They argue that just as industrialization — the first machine age — completely altered the market for physical work, digitization will radically change the market for mental work. Everyone from physicians to product marketers may, in the not too distant future, find themselves scrambling to find work opportunities where machines complement and augment — but don’t yet replace — human capabilities.
Besides writing books, McAfee blogs, tweets, and writes for publications such as Harvard Business Review, The Economist, the Wall Street Journal, and the New York Times.
As for outside interests, he “watches too much Red Sox baseball, doesn’t ride his motorcycle enough, and starts his weekends with the NYT Saturday crossword,” according to his official bio.
Putting aside for another day the question of whether he could be replaced by a computer in one or more of these activities, CIO Straight Talk Editor Paul Hemp talked with McAfee about what The Second Machine Age might mean for IT professionals.
I don’t want to trivialize the breadth of your argument in The Second Machine Age, which ranges from predictions about macroeconomic shifts to public policy recommendations. But what does the book have to say to CIOs?
I think the book has both a specific and a general message for CIOs. The specific one is that the job of technology, the job of making technology work in an enterprise, is certainly not immune to various forces. Those forces are the almost ridiculous technological progress that we’re seeing in areas that used to be the domain of people alone: Natural language processing. Piloting a vehicle. Speech production and synthesis and recognition. Image recognition. Robotics that can move through the physical world.
Like these things, getting technology up and running and keeping it up and running in an enterprise has been a fairly labor-intensive process. However, I hear a lot of anecdotes, and I see some more systematic evidence, that this is likely to change — that the work of getting and keeping technology up and running is likely to become a heavily automated activity.
Heavily automated in what way?
I keep hearing stories like, “I build data centers to order. I put them in shipping containers. I ship them to wherever you want them. You just plug the power and the bandwidth in on one end, and I can spin you up whatever flavor of capacity you want.” And that’s a big deal.
The cloud is also part of this trend. The move toward tablets and other very easy-to-use devices that don’t need a lot of professional care and maintenance — that’s part of the trend, too. I think that, generally, the work of enterprise technologists, which has been very labor-intensive, is likely to change — maybe sooner than a lot of us think.
Now granted, I don’t foresee technology that configures itself and runs itself — completely hands-off, completely labor-free — being adopted by the Coca-Colas of the world tomorrow. That just seems implausible.
Because of the size and complexity of their operations?
Not because of complexity. Companies like Netflix and Amazon and Facebook have astonishingly complicated technology needs; they just have a different stack.
No, it’s because huge enterprises like Coca-Cola have an amazingly big and complex IT legacy. They’re just not going to switch over entirely to the cloud or the iPad, I don’t think, in the next five to ten years. That feels too soon, given the degree of legacy, in every sense of the word, they would need to overcome.
But when we look at start-up companies and how they’re growing, they’ve got nothing that looks like old-school enterprise infrastructure. They start from the ground up. They start from a very different cost and labor trajectory, and I don’t think that they’re going to move over to the older trajectories as they grow. The overall trend is that companies of all stripes will need, proportionately, many fewer people in IT. Those who remain will be very highly valued, very highly skilled, very important.
Inertia and incumbency are powerful forces, but the forces of competition and disruption are likely to be more powerful.
If technology does everything for us in the future, won’t we need people who know how to run it?
That leads me to my more general comment. Enterprises are going to need someone to help them navigate the second machine age, help them understand the sectors along which technology is advancing, how those advances could change what the company does, how they could change what competitors are doing, how the company’s industry is going to change, how business models are likely to morph over time. We’re going to need guides, we’re going to need Sherpas, we’re going to need people to help us understand this. I think that if the CIO plays her cards right, this can absolutely be her role in the enterprise.
Would that sort of consulting role require different skills than those of today’s typical CIO?
Actually, the CTO often plays this kind of role. But this implies, to me, a pretty big opportunity for CIOs. The more traditional role of the CIO — “I deliver stuff on time and on budget and I keep the lights on” — is going to become less important fairly quickly.
What kind of person might this technology Sherpa be? Everybody’s telling the CIO to be aligned with the business and think like the business, but the role you’re describing is somewhat different, isn’t it?
As I said, I think a lot of CTOs today are currently fulfilling that role. And they get help from the consulting companies of the world, from the analyst firms of the world. There’s a pretty big industry devoted to helping people understand the pace and scale and scope of technological change. As the pace of that change accelerates, the role becomes even more important. I can’t tell you the number of senior leaders in enterprises who are saying, “What is this big data thing? What is this artificial intelligence thing? What do you mean ‘robots are about to take over?’”
Is there a response within companies to those questions?
Sometimes there is; sometimes there isn’t. Obviously, you can’t make sweeping statements about lots of different companies, but in general I think a lot of the execs I talk to are really casting about not just for answers but for “Who’s going to help us with this? Where’s the guidance going to come from?”
Can that help come from within the enterprise? Or does it take an outsider with a fresh perspective?
I think both are possible. Companies tend to listen to outsiders more than insiders. But insiders often have a better idea of how to get things done.
How are business executives responding to the book? Are they surprised?
Once you show them enough examples of this kind of science fiction, the gee-whiz stuff that we’re seeing, they start to say, “I think the earth might be shifting underneath my feet.” They are receptive to that message, because the evidence is just growing all the time.
Are they enlivened or enervated by the message?
Technologists are pretty excited about it. Venture capitalists are excited about it. Tech entrepreneurs, the people who consider themselves in the business of either producing technology or using it to disrupt other things, are incredibly excited about it. There’s a palpable sense of energy I feel when I go to Silicon Valley, when I go to San Francisco, when I talk to entrepreneurs at home in Cambridge.
And what about more traditional executives at, say, Coke or some other non-technology company?
Most of them are enlivened, too. I think there is a growing awareness that we are heading into a deeply, deeply interesting time. Yes, a lot of challenges come along with that, but I don’t often get the sense that people wish they could just shut off all the machines.
What about you? After researching and writing this book, are you an optimist or a pessimist about our future as human non-machines?
Oh, a huge optimist. We all want a world where there is more wealth and less toil, less drudgery. That’s the world we’re creating. And again, I think it’s going to come quicker than a lot of us think. I’m massively optimistic about that.
The transition, however, will be painful — it’s already painful — and it’s going to continue to be painful for a lot of people. The issue of “How do we share the economic abundance that technology creates?” is going to be huge. I do think that more and more people are going to have a challenge offering their labor to the economy and having that labor adequately rewarded and valued.
But that’s not the whole story. We did try to emphasize the good news in this book a great deal more than we did in our previous book.
We’re thinking about a look at the general managerial and business implications of this phenomenon. The Second Machine Age is more of an idea book, a policy book. We want to write a business book about what’s going on.
Any initial ideas about what the messages for managers might be?
Fasten your seatbelt. We’re going to try to write a detailed book about that.
Originally published in CIO Straight Talk, No. 5 (September 2014)